Fleet News

PHH backs plan for graduated road tax

PHH Vehicle Management Services has endorsed Labour and Liberal Democrat plans for graduated vehicle excise duty as a means of reducing emissions. The UK's largest fleet management company welcomed the opposition parties' plans to link road fund licence to the size of a car's engine as a means of encouraging the use of smaller cars, but added that any new system would need careful thought before implementation.

The Liberal Democrats are proposing a two-tier scheme under which motorists driving vehicles of under 1500cc would pay a nominal fee to cover VED, while those with cars of more than 1500cc would pay the full fee. Labour's policy is to introduce a graded system designed to ensure that more efficient, less polluting cars pay less VED and company car drivers pay less benefit-in-kind tax if they drive smaller cars.

PHH managing director David Knight said: 'A graded licence system represents a return to the old 'small engine - low cost' thinking of the days when company car drivers were taxed according to the engine size of their car, rather than the current system of taxation based on list price. Fleet managers would be able to specify a maximum engine size to their drivers and thus keep an even tighter hold on the cost of running their vehicles.'

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